A Deep Dive Into a Cybersecurity Stock You Probably Haven't Heard Of

Why this under-the-radar cybersecurity stock deserves attention

The cybersecurity market (here is an article I wrote describing this market) is one of the most compelling sectors today. It’s riding a powerful secular trend, with expected growth exceeding 10% annually over the next decade.

Yet, despite this promising backdrop, finding stocks that combine strong growth with reasonable valuations remains a real challenge:

• On one side, you’ve got the premium-priced high-growth players like Fortinet, Palo Alto Networks, CrowdStrike, and SentinelOne

• On the other, the more affordably valued but slower-growing names like Cisco, Check Point Software, and Verisign.

In this article, I will take a closer look at Akamai Technologies. While the company is not without its risks, its ongoing strategic shift in business model could prove to be a game-changer, potentially reshaping its growth profile.

Let’s dive in!

A transforming business

Akamai (Ticker AKAM) is a global cloud services and content delivery network (CDN). Akamai built a vast global infrastructure to help websites and platforms deliver content faster to users. This was especially critical in the early days of the internet, before high-speed broadband was widespread.

However The CDN business is commoditized, with pricing pressure from cloud giants and smaller providers. In the meantime, the company grew 2 major new activities:

• Cybersecurity. Akamai focuses on zero trust, API security, infrastructure security and application security. Cybersecurity represented 51% of the sales in 2024 (up from 9% a decade ago)

• Cloud computing. Akamai also offers cloud services. Core services offer full stack computing and storage. Edge services offer performance and scalability. Cloud represented 16% of the sales in 2024 (up from 6% a decade ago)

The company has recently made several strategic acquisitions to accelerate its shift in business model. Notable examples include:

• Guardicore (2021). A cybersecurity firm focused on zero-trust architecture

• Linode (2022). A cloud hosting platform aimed at expanding cloud infrastructure capabilities

• Neosec (2023). A cybersecurity startup specializing in API threat detection

These acquisitions reflect a clear push toward strengthening its position in cloud services and cybersecurity, aligning with its long-term transformation strategy.

Growth drivers

The key growth drivers for Akamai are clearly its cybersecurity and cloud computing segments. However, the decline in its traditional CDN business has largely offset these gains, making it harder to appreciate the full potential of the company's strategic transformation. From 2020 to 2024, overall revenue growth has hovered around 5%, a modest figure that masks the strong momentum in its newer businesses.

In 2024 alone, the cybersecurity division posted 14% growth, while the cloud segment surged by 25%. These figures underscore the company's belief that it can achieve double-digit overall growth before the end of the decade, as the weight of these high-growth areas increases in the revenue mix.

Looking ahead, strategic acquisitions will likely remain a key lever. The acquisition of Linode has already proven highly successful, with strong commercial synergies accelerating growth across the cloud division. With a robust balance sheet, Akamai is well-positioned to continue pursuing targeted M&A opportunities.

Finally, EPS should also benefit from margin expansion and a disciplined share buyback program. Over the past decade, the company has reduced its share count by more than 15%, further enhancing shareholder value.

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In the remainder of this article, I will take a deep dive into Akamai’s key metrics, highlight the risks and opportunities ahead, and analyze its fair value, potential returns, and attractive buying zones.

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